Suky Mann Successfully Defends '1million Misfeasance Claim

• Published date: 13 July 2023
• Law Firm: Higgs LLP
• Author: Suky Mann

Suky Mann has recently secured a fantastic result for a director, effectively defending the insolvency claims brought against him by an administrator for misfeasance and breach of fiduciary duties.

Suky's astute analysis of the alleged claims allowed her to dismantle the administrator's evidence on an allegation-by-allegation basis and advance a compelling defence that ultimately caused the claim to fall away in its entirety.

Background

Our client had been a director of a successful and reputable company, with a desire to enjoy an early retirement, he sold his shares in the company to an unconnected third party. Approximately 12 months after our client's resignation, the company's finances nose-dived, and it subsequently entered into administration.

The administrator issued a letter before action against our client alleging that the disposition of his shares and the funding arrangements for the purchase of his shares was a deliberate attempt to extract monies from the company in circumstances where the company was already insolvent. The administrator also claimed that there was never any prospect of the funding being repaid, and the incoming director's intentions had not been interrogated properly by our client before agreeing to sell his shares in the company. As Suky demonstrated, that could not be further from the truth.

The administrator's criticism of our client's exit strategy was pleaded as a breach of his fiduciary duties and misfeasance, with the claim value amounting to almost '1million representing the consideration our client had received from the share sale.

Our approach

It became immediately apparent to Suky that the factual circumstances leading up to the sale were at complete odds with the narrative pursued by the administrator. Despite the extensive nature of the letter before action, the allegations could not be maintained.

Suky's balanced and objective approach enabled her to gain a level of trust with the client quickly. This allowed her to prepare a...